Foreign Policy In Focus

Part 2 of an interview with Drug War Mexico co-author Peter Watt. Also read Part 1.

I recently spoke with Peter Watt, Lecturer in Hispanic Studies at the University of Sheffield, and co-author of a new study examining Mexico’s disastrous fight against narcotrafficking, Drug War Mexico. We discussed the origins and development of the Mexican drug trade, the intersections between neoliberal economic policies and the American-sponsored “war on drugs,” the prospects of continued democratization in Mexico, and what the new presidency of Enrique Pena Nieto might possibly hold for the country moving forward.

You and Roberto Zepeda spend time looking at the effects of the end of PRI hegemony. Some thought the 2000 elections would turn a hopeful new page in Mexican history. You argue it ushered in something quite different. Can you talk about what happened during this change of the guard, and why?

There were great hopes pinned on the supposed transition to democracy in 2000. It’s unsurprising that people were fed up with the PRI [Institutional Revolutionary Party] dinosaur which had been in power for seventy-one years. But electoral pluralism and a change of political party don’t automatically mean that fundamental social problems disappear. What meaning can democracy really have in a country which is governed for and by the rich? The poor and the middle classes lose out every time, no matter who holds the reins. Unless there’s a radical restructuring of how society is run, by whom and for whom it is run, we can’t expect elections to have any profound impact. And unless there is a cohesive and organised popular opposition movement then elites are unlikely to change things much. They need to be pressured to do so, and eventually they need to be replaced by much more democratic forces which address inequality and poverty. But there was never any indication that the PAN [National Action Party] would do anything of the sort, aside from the vacuous rhetoric of the public relations exercises during election campaigns via the mass media.

One key change probably begins before the PRI loses the elections in 2000. As their support is waning, the PAN begins to hold political power in a number of states in the 1980s and 90s. And in those states where the PAN are in charge they no longer have a monopoly over the drugs trade. Increasingly, drug trafficking organizations are able to negotiate things on their own terms. The weakened central authority of the PRI, the increasing social instability and vulnerability of the population brought on by greater poverty and social hardship, is a golden opportunity for organized crime.

And remember that these organizations are very heavily armed and professionally trained. The group, Los Zetas, for example, is formed by deserters from the Mexican army, some of whom, ironically, are ex-anti-drug squad elites, many trained in the United States. All that investment by the Mexican and US governments into training elite squads—courtesy of the taxpayer—is now to the advantage of what has become one of the most dangerous criminal organizations on the planet.

By the 2000s, as Anabel Hernández argues in her book, Los señores del narco, high-level criminals are no longer employed by or subordinate to the PRI, the politicians, the police and the army. Quite the contrary, they are now in a position in which they view the political and law enforcement authorities as their own employees.

The last six years have witnessed a dramatic surge in violence and securitization of the state. We've seen a hideous spike in the number of dead, but you see other troubling consequences as well. Can you unpack these, and discuss their implications for both Mexico and the United States?

Well, the PAN gained the presidency in 2000 under Vicente Fox, promising a shift in Mexican politics. If nothing else, the PAN victory was an unambiguous and final rejection of the PRI. But the hopes that the PAN would provide substantial and structural change soon faded. Only six years later, the left-leaning Andrés Manuel López Obrador’s (often referred to as AMLO) Party of the Democratic Revolution looked like it may very well win the elections. And this despite a vicious propaganda campaign channelled through the mainstream media demonizing him as a danger for Mexico, comparing him to a new Chávez, Mussolini or Hitler, depending on one’s preference.

The possibility of a left turn in Mexican politics was a terrifying prospect for Mexico’s traditional elite, married as it is to the Washington Consensus. The prospect of the reformist AMLO in power was considered too much of a threat to the status quo, which, despite being pretty disastrous for most of the population, nonetheless rewards the rich and powerful handsomely. So it seems the PRI and the PAN made a pact to make sure the AMLO would be denied power, regardless of the vote. In what appeared to be a fraudulent election (something with a long and notorious history in Mexico), the PAN won again, under the leadership of Felipe Calderón. This sparked the largest protests Mexico had ever seen—everyone knew that the political establishment was protecting itself and that its commitment to democratic principles was a total charade.

So it was perhaps a way of distracting popular attention from electoral fraud that Calderón, only after ten days in office, increased the number of troops to 50,000. That’s more than Tony Blair sent to invade and occupy Iraq. No wonder some parts of Mexico now resemble a war zone. The government makes one outrageous claim after another, saying organized crime is taking over, that the war on drugs will make Mexico secure and safe for your children, that there’s an outbreak in addiction rates, that they’re going to reduce homicides, and so on. There are few things as potent as fear to keep people in line.

But if you look at the statistics, it’s the war on drugs itself that has exacerbated all these things. Organized crime has become more powerful since 2006. The flow of narcotics north continues largely unabated. The addiction to narcotics in Mexico has always been tiny compared to the United States or Western Europe. But it’s actually increased since Calderón started this war. And the homicide rate was actually decreasing before he took power. As soon as this military strategy takes hold, suddenly there’s a massive upsurge in violence. And it gets more and more violent every year. The government released figures in August 2012 which indicated that about 100,000 people had been killed between 2007 and 2011. 2011 was the most violent yet, with around 27,000 homicides. That’s three every hour or one every twenty minutes. If this were taking place in some enemy of the Anglo-American empire, like Iran or Cuba, politicians, intellectuals and pundits would be pushing for another military intervention, citing the West’s responsibility to protect, to promote human rights and democracy, etc. But Mexico is a key regional ally of Washington and a major trading partner, so instead the Obama administration actively supports what the government’s doing through massive amounts of military spending under the rubric of The Mérida Initiative.

The magazine Milenio just completed a major investigation into mass graves in Mexico. Their conservative figure for the number of people disappeared into mass graves in Mexico is some 24,000. Note that they say this is “conservative” because some municipalities and states were either unable to or would not provide information. That’s a staggering figure, comparable to some of the worst atrocities of our times. It’s devoid of the ideology that characterised civil wars in the 20^th Century. It’s all about profits, and who’s in control of territory and markets. So the Mexican government’s strategy, supported with military wherewithal by Obama, has massive responsibility in this. Human rights abuses in Mexico have risen dramatically in the last six years. Of the thousands of abuses reportedly committed by the military, which is ostensibly protecting civil society from organized crime, there have been about eight prosecutions in the last six years. So the military are clearly a major problem. And then we have the fact that groups like the Zetas and the Sinaloa cartel, being impeccable capitalists, are forever seeking out new markets, seeing investment opportunities in all manner of human suffering. So organised crime in Mexico is not just about heroin, cocaine, cannabis and meth. Some 41 percent of laundered profits originate in drug trafficking. But 33 percent originates in human smuggling and human trafficking. That comprises kidnapping migrants and forcing them to work as sicarios, or assassins, or forcing them to work as drug runners, holding them in “safe” houses for ransom and killing them when their families can’t pay up. It’s forcing young girls and women into prostitution and reaping the profits and laundering them through major banks. It’s smuggling Mexican and Central American migrants into the United States for an exorbitant fee, often abandoning them in the desert or killing them outright. And there’s been an expansion of all types of criminal activity like extortion, piracy, organ trafficking, illegal pornography and child pornography.

There’s another aspect to this which I think is fundamental. In every war, crisis and conflict, we should look to who is benefiting from the status quo because it’s very possible that they bear responsibility. In this case, the Mexican political and economic elites are doing extremely well. In fact, they have never had it so good. Big business, both domestic and multinational, has never had so much freedom to operate in Mexico. There are far fewer union and labour rights—a process which is set to accelerate under the new administration of the Enrique Peña Nieto. And deregulation and the privileging of investor rights have given corporations a freer hand to fire workers, to impose more stringent working conditions and offer lower pay. And of course, those in high positions in the business sector in both Mexico and the United States are entangled with both governments. Another group to benefit is the banking sector, as mentioned earlier, which launders the profits—millions of dollars—every week. Their interests are also those of the business and political elites. A third group to benefit from the current crisis and chaos is organized crime, which has seen its influence grow massively. And those groups also have ties to big business, the banks and the political system. That’s not a new dynamic but it has become much more influential in the past decade.

So you have a system which favors the super-rich, the politicians and organized crime, all of whom have a shared interest in the continuation of the status quo. Over half the population lives below the poverty line and they don’t see many prospects of improvement. There’s a limit to how much propaganda via the TV, radio, soap operas and advertising can convince people that they’re not being screwed. So as public disillusionment and cynicism with the political and corporate sectors increases, a way to maintain such an unfair and unequal system is through the constant threat of violence, keeping people afraid and using the state security forces to repress and intimidate dissenters and oppositionary social movements. Now that the Cold War ideology of anti-communism has evaporated, the war on the narcos has a secondary purpose, which serves as a pretext for militarizing areas of Oaxaca, Guerrero and Chiapas which have strong traditions of social resistance. Speak to people in some areas of rural Guerrero about their experience of the quasi-permanent military presence there and you soon learn that much of the government’s strategy has nothing to do with narcotics but with social control.

One of the effects of globalization has been to make Mexico ever more dependent on the US economy. By now around eighty per cent of Mexican exports are destined for the United States. Maintaining “stability” in Mexico, making sure that it is a “safe” climate for investors, keeping wages down, dismantling the unions, are all factors that mean that the US government has no interest in seeing a dramatic shift in how things stand.

Finally, Mexico has a new president. Can you offer any thoughts on what we might expect from the EPN sexenio [term of office]?

Enrique Peña Nieto wouldn’t be where he is now if he weren’t backed by Mexican elites, the US government and business. They’re the ones who buy and win the elections. As I mentioned a moment ago, the most powerful forces both in the Mexico and the United States don’t want to see radical change. They want a continuation of the status quo. If that means that most people live in poverty and that some areas are blighted by violence, so be it. That’s an external concern, so as long as it doesn’t affect the bottom line.

Peña Nieto’s political campaign was an advertising campaign, which repeated hollow slogans like, “you’re going to earn more money.” And the campaign was bolstered significantly by mainstream media organizations like Televisa. As documents published by The Guardian demonstrated, the Peña Nieto campaign had effectively been paying for airtime and positive coverage on Televisa.

And then there were the numerous allegations of electoral fraud which followed the elections. For example, the PRI offered food vouchers to the poor, which they could claim once they had voted for Peña Nieto. The lines of poor people lining up to exchange vouchers for food, many of whom were refused, following the election was a fitting illustration of the PRI’s utter cynicism and contempt for the electoral process, something which has a long history in Mexico.

What of Peña Nieto himself? I think what Carlos Fuentes said just a few months before his death summed it up. Fuentes said that if Peña Nieto came to power, the consequences would be unimaginably disastrous because the man is so downright ignorant and incompetent, which seems to me like a very reasonable description. When he was asked by a journalist at a book festival about three books that had influenced his life, Peña Nieto was unable to come up with any that he had actually read. As he faltered over the question, he claimed to have read some passages from the Bible which he thought were really good. He was able to mention one book, La silla del águila, but attributed it to Enrique Krauze, not the actual author, Carlos Fuentes. Fuentes was one of the most influential and respected Mexican and international public intellectuals in the last one hundred years, and Peña Nieto can’t even get the book that he wrote right.

And then there’s his record while he was governor of the State of Mexico, which is much less amusing. When the state government attempts to expropriate land in San Salvador Atenco in order to build a second airport to serve Mexico City, Peña Nieto sends in federal police forces to beat up and imprison protesters. The attack is vicious and brutal. The leaders get locked up in maximum security prisons, one of them receiving a sentence for 150 years. Amnesty International documents numerous human rights violations, including complaints of sexual violence committed by the federal police, beatings and torture. Two people are killed by police.

So when Peña Nieto visits the Ibero-American University during the 2012 campaign, he’s confident that he will receive a warm welcome by the students there. After all, this is a private, fee-paying university. But the exact opposite happens. When he tries to give a speech, the students start yelling “murderer” at him, referring to Atenco, and he’s unable to finish. He eventually has to leave and the campaign team are so worried that something might happen to him that he hides in the restrooms until they find a safe passage for him to exit the university. He later claimed that students protesting against him were paid for the opposition and that they weren’t really students, a falsehood later repeated by Televisa. So the students make a film, which they post on YouTube, in which they show their university credentials. 131 students take part. The movement I Am 132, begins as people start saying that they’re all student number 132. In other words, there are millions of Mexicans who oppose the return of the PRI. The video goes viral on the internet and a vibrant new student movement forms.

So although the Peña Nieto has just announced a strategy to beat organized crime, which he claims will demilitarize parts of Mexico, my feeling is that the new government simply wants to present itself in contrast to what has preceded. There is a possibility that the PRI try to re-establish the control and monopoly of the drug trade, the Pax Mafiosa, that it had during the twentieth century.

But I doubt much will change substantially unless the government is forced to do so by civil society movements. Were there a sustained coalition of opposition movements challenging rule by and for the rich, then maybe things could start to change. But we should not look to Peña Nieto and the corrupt PRI for answers—they’re the problem and we should get away from thinking that they can provide solutions to a status quo which so rewards and benefits them.

Unless there are serious efforts to reduce inequality and combat corruption— neither of which demands a military strategy—there’s little room for optimism in my view. If bankers don’t start going to jail, there’s no inclination for them to act differently. HSBC have just been fined $1.9 billion for laundering money on behalf of organized crime in Mexico, but that fine only affects shareholders, not the individuals who are washing hot money. And it’s not just HSBC—other banks have been accused of money laundering. As Antonio Maria Costa, the former executive director of the United Nations Office on Drugs and Crime has said, in the context of the global financial crisis, it’s drug money that’s helping prop up the banks by giving them liquid assets. Unless governments address this central issue, the war on drugs is but a charade. Drug cartels are ultra-capitalist organizations whose prime concern is the accumulation of profit. In order to tackle organized crime, the governments in Mexico, the United States and the United Kingdom should radically alter the context in which they operate and dismantle the systems, run by the banks, which allow organized crime to accrue massive profits.

In the United States and Great Britain, the crisis in Mexico is represented in the media as a contemporary version of the “white man’s burden”. This is their problem, something they need to sort out, but with our help, of course. But think about where the largest markets and demands are for narcotics. Western Europe and the United States. The same for sex trafficking. And finally, think about where those banks that launder the cash are centred. It’s Manhattan, Miami and the City of London. Stephen Green, the former CEO and chairman of HSBC, left the company to join the cabinet of Prime Minister David Cameron and became Trade Minister. During his tenure at HSBC, he received about £25 million in bonuses and shares. At the same time, Mexicans, Americans and Britons are being told to tighten their belts in the context of severe austerity cuts to public services. Green also acts as adviser to British Chancellor of the Exchequer, George Osborne on banking of all things. That sounds very much like our problem too. 

Part 1 of an interview with Drug War Mexico co-author Peter Watt. 

The past decade has not been kind to Mexico. Since officially transitioning from one-party rule in 2000, the country has witnessed the perverse effects of neoliberal economic policies, the striking rise in power of locally based drug traffickers, state-sponsored violence that has left tens of thousands dead and countless others victimized by human rights abuses, and a political system riddled with corruption. For many observers unfamiliar with Mexico, especially those next door in the United States, these developments have come as something of a shock.

As Peter Watt and Roberto Zepeda argue in their excellent new book, Drug War Mexico, however, the recent security crisis in Mexico hardly emerged from nowhere. The authors convincingly demonstrate that the country’s current troubles result from the confluence of long-standing factors, not least the economic interventions of outside powers, which have been exacerbated and reinforced by the government’s heavily militarized fight against Mexican narcotraffickers. The consequence, according to the Watt and Zepeda, is a country characterized by violence and ever deepening inequality.

I recently spoke with one of the book’s authors, Peter Watt, Lecturer in Hispanic Studies at the University of Sheffield, about the origins and development of the Mexican drug trade, the intersections between neoliberal economic policies and the American-sponsored “war on drugs,” the prospects of continued democratization in Mexico, and what the new presidency of Enrique Pena Nieto might possibly hold for the country moving forward. This is the first in a two-part series.

One of the great features of the book is its insistence on shattering the “state vs. traffickers” dichotomy that characterizes a lot of writing on the Mexican drug wars. Instead, you argue that traffickers benefit from the state and that state actors benefit from the drug trade. Can you talk a little about what this looks like, how it has developed, and how it can be understood in the current context of Mexican politics?

The mutually beneficial relationship between smugglers of contraband and the political and economic elites goes right back to the beginning of the twentieth century. During the Mexican Revolution, central government was preoccupied that the internal turmoil and instability of the conflict would allow for an invasion by the United States. This they viewed as a real possibility given that Mexico had lost more than 40 percent of its land to the United States in the mid-nineteenth century. At the same time, the government was equally concerned about the growing insurrection in the northern states and the influence and popularity of anarchist figures like the brothers Ricardo and Enrique Flores-Magón. In this context, President Carranza granted quasi-autonomous powers to states like Baja California in order to offset the danger of rural insurrection. From the outset, then, a certain leniency was afforded to organised criminal activities, while dissent and activism were harshly punished. The northern states were still cut off from the metropole because of distance and because of the remote terrain and mountains, despite the fact that capitalist development in Mexico had invested heavily in building 10,000 miles of new railroad prior to the outbreak of the revolution.

The then governor of Baja California, Esteban Cantú, also a military general, takes advantage of the fact that central government is essentially leaving the north to get on with things, so long as they prioritise quelling rebellions and staving off incursions by the US army. Cantú forbids the use of Mexican currency, printing his own instead, and raises his own taxes. Using his power with near complete impunity, he makes a personal fortune from prostitution, extortion, gambling and smuggling contraband into the United States. Governors like Cantú actually favored the prohibition policies, not for the same reasons that Nancy Reagan preached “Just Say No,” but because prohibition virtually guaranteed that the price of opium and heroin would rise. For those in power who could abuse their positions with few or no legal consequences, it was a way to get rich quickly.

Both Mexico and the United States ban the sale of narcotics in the 1910s and 1920s, pushing what ultimately is an issue of public health into the black market and the informal economy. When alcohol sales are outlawed in the US between 1919 and 1933, Mexican smugglers step in to satisfy the appetite for illicit booze. And again, prohibition assures enviable profit margins for those involved in smuggling. The United States Border Patrol is created in 1924, but the border is so massive—some 2,000 miles in length—and most of the terrain remote, it’s impossible to police efficiently. Combined with impunity for official involvement, corruption within the political system and plenty of poor people as a labor force, these factors allow for the smuggling of contraband operate relatively unhindered.

But the systematic control of the drug trade by the political elites really takes shape during the rule of the Institutional Revolutionary Party (PRI), in power from 1929 to 2000 (and which returned to power in 2012). Between 1938 and 1939 the Mexican federal narcotics reserve, a branch of the department of health, proposes establishing a government monopoly on the drugs trade. The US government responded by instituting an embargo on medical drugs to Mexico and thus the plan was abandoned. Yet while the formal and legalised monopoly of the drugs trade proved impossible, informal and tacit arrangements took their place throughout the eight decades of PRI rule.

Following the war, in 1947, with encouragement and backing from the US government, Mexico creates its own secret police force, modelled on both the FBI and the CIA. The newly formed DFS is an organization charged with political spying, maintaining what the PRI refers to as political ‘stability’, and punishing and quelling oppositionary social movements. The PRI can’t stay in power for 71 years without monitoring and either co-opting or punishing dissenters, and the DFS is one of the best weapons in its armory. The DFS is allowed to operate with complete impunity and is lavished with enormous sums of money. A system develops in which the DFS spies on and takes out subversives, Marxists, Communists, student activists and guerrillas, but also acts as a go-between between organised crime and the political elite.

In order for traffickers to operate they end up needing the permission, aid and wherewithal of the DFS. Under the PRI, the system comes to be known as la plaza, or “town square” in English. Having permission to work a plaza means having privileges—granted by the police, military, mayors, state governors, the DFS—to smuggle drugs in a certain area without interference from the authorities. In fact, in order to guarantee immunity, a number of traffickers, like Pablo Acosta, were given DFS badges and guns in order to fend off unwanted attention from the law. In return for such freedoms, traffickers would make monthly payments to the authorities. When they failed to make payments they ended up arrested or assassinated in the latest sting against narcotraffickers, something which always made for good stories in the media.

Because these arrangements were mutually beneficial to trafficking organisations and the political system, the violence was less widespread than it is today and the Pax Mafiosa which characterised the PRI years was due in large part to the fact the many criminal organisations were essentially tacit employees of the political system. Everyone understood who was in charge and only the most foolhardy defied the DFS and the politicians. That’s not to say that it wasn’t violent—it was, but the levels of violent conflict we’re witnessing today are unprecedented.

There are a couple of causal factors and critical junctures the book focuses on which you suggest are central to understanding the evolution of Mexican drug trafficking. One is neoliberalism. Can you discuss the significance of neoliberal policies on the Mexican economy and the development of the drug trade?

There’s an argument that beginning in the 1980s, PRI hegemony begins to break down. The party experiences a crisis of legitimacy as the population begins to view the PRI dinosaur as an eternal, yet corrupt, political institution which now serves only its own interests. From the 1930s to 1982, Mexico had one of the most protectionist economies in the region and among the largest public spending programs. Insufficient as they were, there were at least some social safety nets afforded to society’s most vulnerable. And then there was the land reform which had to an extent democratised ownership in the wake of the revolution.

Beginning in 1982 the PRI abandons its national revolutionary project in for the neoliberal model of privatization which demands the retreat of the state from public responsibilities in favor of market forces. And the profile of those at the top of the political system changes significantly. Previously, the elite of the PRI comprised those who had served for years in the party machine and had experience of the political system. By the 1980s, however, it’s clear that this has changed—now the party is run by moneyed technocrats educated at Harvard, Princeton, and Oxford who have essentially bought themselves into political power. Some members of the old guard, like Cuauhtémoc Cárdenas, the son of President Lázaro Cárdenas, one of the architects of the post-revolutionary state, are expelled for being too left-wing.

In addition, the Partido Acción Nacional (PAN) makes serious headway in the elections and holds governorships in a number of states, meaning that organised crime doesn’t just have to negotiate with the PRI anymore.

There are several other important factors too, all of which contribute to a perfect storm. One is that when Ronald Reagan launches a campaign against Colombian narcotraffickers smuggling narcotics through the Caribbean and into Miami, the Colombians move their business westward to Mexico. That way they avoid the heat of Reagan’s South Florida Task Force in the Caribbean with the added advantage that the Mexicans will perform the most dangerous stage of the operation: transporting drugs into the United States. And now it is the Mexicans, not the Colombians, who risk lengthy jail terms in the United States. At first the Colombians take the lion’s share of the profits, but increasingly, the Mexicans, who have their own distribution networks in the US, are able to manage things on their own terms. As a result, Mexican cartels become richer and more powerful.

A further contributory factor to the growth of cartels aided by the active complicity of the political system is Reagan’s other war, the one in Central America. In order to rid Central America of the “communist cancer” once and for all, the CIA used the Contras to attempt the overthrow of the Sandinista government of Nicaragua. As stories in the international press emerged that the Contras were committing systematic human rights abuses, terrorising the civilian population and purposefully destroying the country’s infrastructure, the US Congress reduced the funding available to train and arm the Contra army. For Colonel Oliver North and the CIA, however, that simply wasn’t good enough. So they sold arms to Iran in order to raise funds that would then be diverted to the Contras to overthrow the Sandinistas, who, as Reagan claimed, were intent on invading the United States. That a country of three million impoverished peasants with no naval fleet and a tiny military had neither the intention nor the capacity to invade the most powerful economic and military power in world history was lost on the US media.

Also lost on the American media was that in order to circumvent the lack of funds available to overthrow the democratically-elected Sandinistas, now the CIA was using the Guadalajara cartel and the DFS to ship money and arms to the Contras. In return, these traffickers, with DFS assistance, were essentially given free reign of cities in the US Southwest and California, having been granted a green light by the CIA. One also wonders to what extent this intensified the explosion of crack cocaine in US inner-cities in the 80s. Such a policy inevitably contributed to the growth of organised crime in Mexico. The one person in the US media who reported this, Gary Webb, was completely marginalised for doing so and the San José Mercury News, where he had published the investigation, eventually let him go after intense political pressure.

And then there’s NAFTA.

The neoliberal programme accelerated significantly when President Salinas signs the North American Free Trade Agreement in 1993, coming into law in 1994. What did the planners of the neoliberal program expect to happen with a massive transfer of wealth from the poor to the rich? The Clinton government knew full well that an immediate effect of NAFTA in Mexico would be massive internal displacement and an increased migration to the United States. In the same year, the US government stepped up its militarisation of the border with its Operation Gatekeeper, something which pushed undocumented migrants to ever remoter and more dangerous areas, vulnerable to extreme climatic conditions, thirst, hunger and the activities of criminal gangs poised ready to profit on the latest expansion of human misery.

During the negotiations for NAFTA, members of the DEA and the US Customs Service raised concerns which should have been obvious to anyone who gave the potential repercussions of the treaty any thought. They were worried—correctly, it turns out—that deregulation and free trade would be a win-win situation for drug trafficking organizations. But both Presidents George HW Bush and Bill Clinton explicitly prohibited them from raising the subject publicly. I doubt they actively wanted drug cartels to flourish. It’s just that it was an external or secondary concern to pushing through free-market policies.

NAFTA exacerbated problems already existent in Mexico. What we do in the book is question the validity of the neoliberal project and discuss some of its most destructive attributes. You have to be a real ideologue to still believe that the free-market somehow equals democracy. But unfortunately the falsehood that the market takes care of all ills is still a widespread piety—which is one of the reasons we dedicated much of the book to taking it apart. And it’s not just in Mexico that this is happening—it’s all over the place.

Can you discuss some of those attributes?

One of the key components of NAFTA is an attack on Article 27 of the Mexican Constitution. Land reform had been very much the crowning achievement of the 1917 document, which was pretty radical for its time. Communal land rights, for the first time since the Revolution, come under attack with NAFTA in a move to sell off more of Mexico’s resources to foreign investors and private interests. That’s one of the reasons that the Zapatista insurrection becomes publicly visible on January 1, 1994. They see NAFTA—rightly in my view—as a selling off of public and natural resources to Mexican elites and multi-national corporations.

As part of the structural adjustment programmes accelerated by NAFTA, the government removes subsidies to small-time farmers and on foodstuffs for the poor. And at the same time, the prices of basic foodstuffs like milk and tortillas increase.

What are some of the results of these changes? Mexico, which in the 1960s had been largely food self-sufficient, by the NAFTA period is orienting its produce to the export market. At the same time, the market is flooded with cheap foreign products, like corn. As the stringent measures imposed on Mexican farmers have not been imposed on their US counterparts—for US agriculture continues to receive taxpayer subsidies while these are cut back in Mexico—the mountain of US corn finds a market in Mexico, effectively denying millions of agricultural producers a living. So in the first six years of NAFTA, two million farmers leave the land. And they migrate to the ever-expanding metropolises, the sweatshops, or maquiladoras, in the north or to the United States. Thus, in the late 1990s and the early 2000s the number of people illegally crossing into the United States reaches an unprecedented level, some 500,000 annually, becoming the largest migration of people across a border on the planet.

While neoliberalism rewards Mexico’s rich with ever greater entitlements as the number of billionaires increases dramatically, the gap between rich and poor reaches new levels as the few social safety nets available to society’s most vulnerable get cut back. So as well as migrating, as you might expect, growing numbers of people are obliged to seek work in the informal economy. By the mid-2000s, this could be as much as half of the economically active population.

Now, with the fluctuation of prices for basic foodstuffs destined for the export market, it should be no surprise that some producers turned to crops that always wielded a stable and more profitable return. Growing poppies and marijuana had the advantage of fetching a higher price than corn, vanilla and beans. Neoliberalism in Mexico had the effect of pushing people towards the informal sector; there are now probably more people working in the illicit drugs trade than in the petroleum industry. If policy makers are serious about reducing the traffic of drugs passing through or originating in Mexico, the first and most crucial step is to alleviate poverty and reduce the perverse distribution of wealth which sees Carlos Slim, the world’s richest man, acquire $27 million every day, while over half the population has to make do with $2 a day.

During his presidency, Carlos Salinas privatizes more public assets than any of his predecessors. Many of these companies are sold off to friends in the economic and political elite, moneyed supporters and contributors to the PRI, a fact that kind of undermines all that religious zeal about the free market and competition. Many of these people have interests in the narcotics trade for the simple reason that they’re out to make money, and there are few easier ways of making money fast than trafficking drugs. So they buy up public assets and end up using these companies as places to launder the illegal proceeds from narcotics. Another key component of all this is that Mexican banks—many of which had been nationalised in 1982 as a result of the economic crisis—are privatized again in the 1990s. Again, it’s not that they’re sold off to those individuals and sectors which are particularly good at banking—instead they go to millionaire friends and supporters of Salinas. Privatization thus becomes a way for the rich to become some of the wealthiest people in the world. Just look at Forbes magazine’s list of the richest people in the world. Many of them are Mexicans and one is Joaquín “El Chapo” Guzmán, the leader of the Sinaloa cartel.

Anyway, the deregulated banking sector is virtually unaccountable and is now able to launder billions of dollars of hot money more easily on behalf of organized crime. Carrying a million dollars around in a briefcase is not like in the movies—it can’t be done. You can get about $250,000 in denominations of $50 dollar bills in one case. But the cartels are earning billions every year. Amado Carrillo Fuentes is by the mid-1990s bringing in plane loads of drugs from Colombia. They called him El señor de los cielos, or Lord of the Skies, because he had a fleet of Boeing 727s which he used to collect cocaine in Colombia, flying it up to Mexico every week, apparently without any of the authorities or politicians noticing. Well, what does one do with billions of dollars of illicit money? It’s risky to move it around in trucks. So you set up accounts at Bank of America or Citibank under aliases. Or, you do what Raúl Salinas, the brother of the president, was accused of by Swiss investigators and move it to offshore tax havens. All this helps make the cartels very powerful indeed—it’s difficult to see how they could have grown without somewhere to launder and keep all that cash. And it allows the banks in Mexico, the United States and the United Kingdom to have access to billions of dollars in liquid assets every week.

To be continued.

We're honored to have Michael Busch dissecting the latest WikiLeaks document dump for Focal Points. This is the forty-third in the series.

Once Latin America’s safest city, Monterrey—in the north of Mexico—has become a central battlefield in the country’s war against drugs. Each day, scores of people, many in law enforcement, are gunned down on Monterrey’s streets as increasingly powerful narcotraffickers contest the Mexican government’s sovereign control over its richest city. 

As a US embassy cable published Saturday by WikiLeaks shows, however, the fight between Mexican authorities and the country’s drug gangs is hardly a clear-cut case of good guys taking on the bad. 

Written at the start of 2009, the cable examines civil society efforts to combat the rising influence, and attendant violence, of drug traffickers in Monterrey and its immediate surroundings. Diplomats at the local consulate note that

As the wave of kidnappings, extortion, and narco-violence continues in the Monterrey region, the public—across all socioeconomic levels and classes—remains fearful.  Attention shifts from one incident to another, whether it be the January 6 grenade attack on the Monterrey Televisa broadcast offices, the January 18 murder of a wealthy adolescent departing a nightclub, or the January 25 dumping of a tortured corpse outside the state government’s anonymous tipster office. Many local experts do not expect the situation to improve anytime soon.

One of those experts, Governor Socrates Rizzo of Nuevo Leon, the state in which Monterrey is located, told American diplomats that a large part of the trouble came from a compromised local government which was ineffectual at best, thoroughly corrupted by drug money at worst. “If citizens are afraid to turn to the authorities when faced with threats,” the cable concludes, “then truly crime victims are on their own.”

Making matters worse, Rizzo openly worried that the national elections slated for July—which dealt a decisive blow to President Felipe Calderon’s ruling PAN party—would draw drug traffickers and organized politics even closer.

While the two principal parties—PRI and PAN—had both taken steps to guard against the infiltration of narco-money in the campaigns, in practice it would be virtually impossible to prevent organized crime from bankrolling candidates. One way the cartels could impact the race would be to just bribe television anchorpersons and commentators, thereby ensuring that their particular candidate would receive favorable coverage. Alternatively…organized crime could provide a candidate’s staff with walking around money to distribute to voters. 

Not only that, “applicable campaign finance regulations only cover the candidate, so that it would be easy to simply funnel the narco-money to a family member.”

The prospect of elections also brought to light the scarier prospect that rival politicians might use their connections to organize crime to violently contest for political control. The January 6 attacks on the Televisa headquarters, it turns out, were likely not 

a response to any reporting done by that broadcast outlet on the cartels. Instead, [media representatives] saw it as an attempt by organized crime to inflict political damage on the current Nuevo Leon State Secretary for Governance—who happens to be the current governor’s preferred candidate to win the PRI nomination in the gubernatorial race. Under this line of argument, political mafias contracted organized crime gunmen to carry out the attack—if true, an even more chilling scenario [than] the alternative theory that the cartels themselves were behind the assault. 

While the Institutional Revolutionary Party (PRI) cleaned up at the polls, violence in Monterrey and across the country has only increased in frequency and magnitude. Local politicians and law enforcement have been particularly under attack. Just this Thursday, an elite squad of police in Garcia—a Monterrey suburb town—was attacked by a team of former police officers working for organized crime. The next day, Jaime Rodriguez—mayor of Garcia—barely survived an assassination attempt as he traveled to Monterrey. 

Three mayors nationwide have already been murdered since the start of 2011, and a fourth is currently missing. Nearly 1,200 Mexicans have lost their lives to drug-related violence since January.